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An open letter to the head of Eskom“It’s a painful adjustment, but an unavoidable adjustment for a sustainable and secure future,” said Eskom CEO, Jacob Maroga.
Come on, Mr Maroga, surely you jest? Painful for you? I don’t think so.
As if it were not enough that through a lack of Eskom’s planning, we suffered massive rolling blackouts that swept across South Africa; that the economy was hit from big industry which could not reach its production targets of even the smallest of companies’ bottom lines; where citizens were trapped in lifts and in huge traffic jams amid periodic shortages of electricity.
To add insult to injury, you hit us on the back side of the head in June this year with a 31% increase, after requesting a 34% raise.
Now you want to triple the price of electricity over the next three years! Most of us are still trying to pick ourselves up and dust off the effects of the economic slump. Some of us, in fact, are still on the floor. Your ‘power giant’ is apparently trying to lessen the shock to consumers by calling for an even steeper increase as an alternative.
No, Mr Maroga, seriously?
Even if Eskom gets the increase option it wants, it will run up a shortfall of R63.3 billion in the three years to 2013, but you said the corporation was “committed to closing” this. Eskom’s total shortfall for the six years from 2009/10 to 2014/15 is predicted to be R122bn.
Despite the shortfall, you said the increased tariffs would help Eskom secure its revenue base, which would make “funders more confident”. If Eskom gets what it wants, it means 2012 prices will be four times that of 2008!
You claim that Eskom cannot sustain its programme of building new power stations without the hefty increases and may have to delay part of the building programme if you do not get them.
You further claim that the primary energy costs – mainly coal to run power stations – were expected to more than double from R25bn a year in 2009/10 to R56bn in 2014/15. Operating costs were expected to nearly double, from R31bn in 2009/10 to R57bn in 2014/15.
DA MP Sejamothopo Motau called the increase request an insult and an abuse of the public’s good faith – and frankly, I agree.
Motau added that coal prices had fallen by nearly 60% in the past year, but Eskom was already charging many South Africans “more than double the international norm at 65c per kilowatt hour”.
Cope’s Phillip Dexter said the party was outraged at the request and that the projected shortfall indicated mismanagement and incompetence.
Mr Maroga, I think it must have slipped your mind that you were also warned by an international energy expert that the utility was heading for a coal crisis, six months before the power crisis paralysed the country in January last year, yet you completely ignored the report.
If Shoprite, Pick n Pay or Clicks treated their customers as Eskom does, their sales would collapse, their shareholders would flee and they would close their doors. If Unilever or Tiger Brands failed to invest in the necessary infrastructure and could not meet demand on the shelves – same story.
But Eskom is an apartheid-era monopoly, one in a unique position to roll back all the economic growth that better businesses have brought to South Africa in the last 15 years.
And while the South African public is at the receiving end of this dilemma, you receive a reported 27% salary hike.
I think we can all see the light and it is shocking. Shame on you.
